High Court Upholds Tribal Jurisdiction in Dollar General Case

A tribal court for the Mississippi Band of Choctaw Indians has jurisdiction to decide a case involving a teen worker at a Dollar General store on tribal land who claims a manager sexually molested him, according to a June 23 Supreme Court ruling.

The 4-4 decision will leave intact a ruling by the 5th U.S. Circuit Court of Appeals, which held that the teenage tribe member's negligent hiring claim against the retail chain will be heard in tribal court rather than in a U.S. court.

"The 4-4 vote is effectively a default ratification of the earlier decision from the 5th Circuit," according to W. Gregory Guedel, an attorney with Foster Pepper in Seattle. "For now, the precedent value is essentially the same as if the case had only been decided at the 5th Circuit level."

"It is possible that when a new justice is appointed and the Supreme Court is back to the full nine members, another case with similar issues could be decided that either strengthens or contradicts the Dollar General decision," he said. Guedel is the chair of Foster Pepper's Native American practice group.

Sexual Molestation Charges

Dollar General operated the store on tribal land in accordance with a lease agreement and business license that was issued by the Mississippi Band of Choctaw Indians.

In 2003, a teenage member of the tribe who participated in an unpaid youth job-training program claimed the store's manager, a nontribal employee of Dollar General, sexually molested him while he was working in the store.

The teen worker sued Dollar General in tribal court, asserting that the company was vicariously liable for the store manager's conduct and that it negligently hired, trained or supervised him.

Dollar General fiercely disputed the tribal court's jurisdiction over the lawsuit and sought an injunction from a U.S. federal court.

The 5th Circuit ultimately affirmed a U.S. District Court for the Southern District of Mississippi ruling that the tribal court could exercise jurisdiction over the case because Dollar General had a "consensual relationship" with the tribe and its members.

Supreme Court precedent allows tribes to regulate "the activities of nonmembers who enter consensual relationships with the tribe or its members, through commercial dealing, contracts, leases, or other arrangements" (Montana v. United States, 450 U.S. 544 (1981)).

Even though the teen employee worked only for a short time at the Dollar General store, he was "essentially an unpaid intern, performing limited work in exchange for job training and experience." This is "unquestionably" a commercial relationship, the federal appeals court ruled.

The 5th Circuit said there was a sufficient connection between Dollar General's participation in the youth training program and the teen worker's sexual assault claims.

"In essence, a tribe that has agreed to place a minor tribe member as an unpaid intern in a business located on tribal land on a reservation is attempting to regulate the safety of the child's workplace," the court held.

Ruling Doesn't Change Anything

The ruling leaves the existing paradigm intact, according to C. Bryant Rogers, an attorney for the tribe. "People generally understand that they can be sued in the places they do business."

James Nichols, an attorney with Dorsey & Whitney in Minneapolis who specializes in American Indian law, agreed that previous legal rulings have "been quite consistent in terms of tribal jurisdiction for nontribal members."

Nichols said that employers shouldn't be afraid of tribal courts. "The tribal court in this case rivals that of many state court systems. The assumption that companies can't get a fair shake in tribal court just isn't the case," he said.

Employers that do business on tribal land should become familiar with the laws in that jurisdiction, Nichols said. Most of those laws are either published or can be easily obtained from the tribe.

Employer Procedures Should Include Tribe's Policies

"The Dollar General decision means companies operating businesses on tribal land need to consider themselves subject to the legal jurisdiction of the tribal government and the tribal court," Guedel said.

"Companies should pay particular attention to tribal employment regulations and policies involving employee rights, as these may differ significantly from the state or federal regulations that apply in other local areas," Guedel said. "If the tribe requires employers to follow certain procedures for hiring, employee discipline and grievances, and similar personnel matters, companies need to be aware of and integrate these policies into their own procedures," he added.

The decision is Dollar General Corp. v. Mississippi Band of Choctaw Indians, No. 13-1496.​